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EXCLUSIVE: UK International Trade Secretary Liz Truss has privately raised her deep concerns about Boris Johnson’s Brexit border plans in a letter leaked to Business Insider.
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The UK has announced that full border controls on goods will not come in until July next year, despite Britain leaving EU trading rules at the end of 2020.
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In a letter to other senior Cabinet figures on Wednesday, Truss warned that the plans risk causing smuggling from the EU and could face a legal challenge from the World Trade Organisation.
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She wrote to the Chancellor of the Exchequer Rishi Sunak and the Chancellor of the Duchy of Lancaster Michael Gove setting out her four “key concerns” about the plans.
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Truss warned that the plans could break international trading rules which would “significantly impact on the UK’s reputation at the WTO.”
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A government spokesperson said: “We do not comment on leaks.”
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Boris Johnson’s Brexit border plans could break international trading rules, risk the UK’s international credibility, and lead to smuggling from the European Union, a senior member of his government has warned in an explosive leaked letter seen by Business Insider.
The government announced last month that full border controls will not be applied on goods until July 2021, despite Britain leaving EU trading and custom rules at the end of 2020.
Business Insider revealed last week that the decision has led to serious concerns from business groups that the delay risks a “disaster” for firms trading with the EU.
Now International Trade Secretary Liz Truss has written privately to the Chancellor Rishi Sunak and the Chancellor of the Duchy of Lancaster Michael Gove expressing her four “key areas of concerns” about the government’s plans to leave EU trading and custom rules at the end of 2020.
In the leaked letter, dated Wednesday, July 8, Truss warned that the plans would create a series of logistical, political and reputational risks for the government, including:
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A potential legal challenge from the World Trade Organisation.
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Increased smuggling from the EU if not all UK ports are ready to carry out checks.
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Concerns over the union if EU tariffs are applied to all goods heading to Northern Ireland by “default.”
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The undermining of the UK’s international trade policy.
Truss warned Sunak and Gove that failure to make sure all ports are ready by July 2021 could lead to smuggling into the UK at those that are not able to carry out the full range of checks on incoming goods.
“I would like to assurances that we are able to deliver full control at these ports by July 2021 and that plans are in place from January to mitigate the risk of goods being circumvented from ports implementing full controls,” she says.
Truss also wrote that she was worried that the UK’s plan for a phased approach to checks on goods coming from the EU between January and July could be legally challenged at the World Trade Organisation.
She warned that the UK would “be vulnerable to WTO challenge” due to its border policy.
This is because the UK plans to temporarily give the EU preferential treatment, which could be a breach of WTO rules if there is no UK-EU free trade agreement in place.
Truss also suggested that as of January 1, all goods going to Northern Ireland from elsewhere in the world will have the EU tariff applied to them by “default” as the planned system for applying both UK and EU tariffs is not expected to be ready on time.
“I understand that the digital delivery of the dual tariff system (both EU and UK tariff) in Northern Ireland is a high risk and that HMRC are planning to apply the EU tariff as a default to all imports in NI on 1 January 2021,” she wrote.
Truss wrote that she was worried that it would anger unionists in the province, telling Gove and Sunak: “This is very concerning as this may call into question NI’s place in the UK customs territory.”
This section of the letter will fuel concerns in Northern Ireland that businesses in the province face significant new costs as of next year. Business Insider reported last month that businesses were considering leaving the province in anticipation of trade with Great Britain becoming more expensive.
Responding to the leaked letter, the Northern Ireland Retail Consortium’s Aodhan Connolly said: “If true, a plan to implement EU tariffs as a default provides unprecedented problems to retailers who trade in Northern Ireland.”
He told Business Insider: “Retail accounts for 70% of the value of trade that crosses GB-NI and even if we were able to reclaim the tariffs the implications for cash flow while waiting for refunds makes the premise untenable.”
He added: “I am glad the International Trade Secretary shares our concerns about a workable system being in place by January 2021. That’s why we want to see tried and tested off the peg solutions such as a trusted trader or green channel scheme that will remove friction and allow the majority of goods to flow freely.”
In her letter, Truss also appears to confirm that a previous UK government plan to waive customs declarations on exports to the EU had been dropped.
“I am pleased to hear that following the XO meeting last Friday, it was decided that the temporary waving of export declarations will not be included in the publication,” she says.
Truss signs off by telling her colleagues that “we need to ensure that the UK border is effective and compliant with international rules, maintaining our credibility with trading partners, the WTO and with business.”
The trade secretary asks her colleagues for reassurance that every UK port will be able to deliver all necessary checks and controls by July 2021, when the government’s phased approach to border controls beginning in January will end.
The UK trade department needs a “clear view of operational plans, timescales and risks going forward,” Truss wrote.
The leaked letter comes ahead of Prime Minister Johnson’s government publishing its full plans for how the borders will work from January 1. HMRC is set to publish the long-awaited plans on Monday, July 13.
The opposition Labour party said the letter showed the government were “making things up as they go” on Brexit
“This letter confirms fears that several ministers have been making things up as they go with a lack of awareness of the real world consequences of border policies they’ve had four years to develop,” Rachel Reeves MP, Shadow Chancellor of the Duchy of Lancaster and Shadow Cabinet Office Minister, said.
“At the general election, people were promised an ‘oven-ready’ deal to be implemented by the end of this year, not chaos, confusion and a further risk to jobs.”
A government spokesperson said: “We do not comment on leaks.”
Truss’ ‘explosive’ letter confirms worries of business groups
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Truss’ letter, which was also shared with Home Secretary Priti Patel, echoes concerns voiced by business groups in recent weeks over the UK’s readiness for leaving the European single market and customs union in 2021.
Multiple groups last week told Business Insider that Johnson’s government had failed to guarantee that the new IT system for processing customs checks on exports — the Goods Vehicle Movement Service — would be ready on time.
Alistair Carmichael, the Liberal Democrats’ spokesperson for Brexit and foreign affairs, said the email revealed today was “explosive” and “reveals the panic in the dark corridors of Whitehall.”
He called on Johnson’s government to explain it to Parliament, telling Business Insider: “At a time when the UK is already facing the COVID-19 crisis, we cannot afford to crash out of the EU without a deal in place or to accept bad deal.
“Time and again this Government has brushed off concerns about the damaging consequences of Brexit for trade and the border on the island of Ireland. This explosive email clearly reveals the panic in the dark corridors of Whitehall.
“It is essential the Government publishes detailed impact assessments immediately and come before Parliament and be honest with the public.”
Naomi Smith, CEO of Best For Britain, a group campaigning for a comprehensive UK trade deal with the EU, said: “The government ignored concerns that we wouldn’t be ready to end the transition period on 31st December, despite numerous warnings from business and trade bodies.
“This letter proves that those concerns were valid, and the senior Cabinet minister trusted with Britain’s future trade shares them.”
The campaign group has also called on Truss to publish the letter in full as well as Gove and Sunak’s response.
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